Cost of bad hire

The price to hirers of getting it wrong has been estimated.

Cost of bad hire

UK & Europe

The cost of getting a hire wrong has been estimated at up to an initial hit of £50,000.
Founder of yourpeoplemarket.com, Chris Smith, believes the average cost of hiring a new member of staff could start at £5,000 with this amount increasing with the seniority of the role.

He said: “With any business venture you should always look at your return on investment – this goes for employing new staff too.

“In order to work this out, you must first find out how much it actually costs you to find that new member of staff.”

After speaking to numerous business owners, Chris has found that many of them look at advertising and salary as the expenses involved but this is only a small part of it.

He continued: “In recent years, more and more businesses have been carrying out recruitment themselves in order to save money, but very often they will end up spending more.

“Putting together a job specification, writing an advert, sorting through CV’s, rounds of interviews, ability and psychometric testing all takes the time of a manager which isn’t cheap.

“If you add up how much the time alone costs a business you would probably be shocked by the figure.

“And with unemployment figures rising, more people will be applying for jobs, which means that you will be spending even longer on the employment process – and that means spending more money.”

Hiring the wrong employee can mean that you have to repeat the process, so it is crucial that you spend plenty of time reviewing CV’s and interviewing candidates.

Chris advises using a recruitment agency to keep your costs down and gives you a better chance of finding the right candidate for the role.

He said: “If you do end up making the wrong decision on a new employee – and we’ve found that one in five employers do - you have to repeat the process from the beginning.

“We try to remove that risk for employees and aim to help them save money when recruiting rather than waste money.”

yourpeoplemarket.com eliminates the risk of hiring a poor recruitment agency and helps to ensure that you pay the right price for their services.

Every recruiter’s performance is visible and supported by a ratings system so an employer can have confidence in the companies with whom they choose to engage.

It’s a completely risk free service, since employers only pay the recruitment agency when the job has been filled, and there is a completely hassle free rebate structure should the new employee not work out.



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